Correlation Between Chinese Maritime and Tsang Yow
Can any of the company-specific risk be diversified away by investing in both Chinese Maritime and Tsang Yow at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Chinese Maritime and Tsang Yow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chinese Maritime Transport and Tsang Yow Industrial, you can compare the effects of market volatilities on Chinese Maritime and Tsang Yow and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Chinese Maritime with a short position of Tsang Yow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Maritime and Tsang Yow.
Diversification Opportunities for Chinese Maritime and Tsang Yow
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chinese and Tsang is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Maritime Transport and Tsang Yow Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsang Yow Industrial and Chinese Maritime is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Chinese Maritime Transport are associated (or correlated) with Tsang Yow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsang Yow Industrial has no effect on the direction of Chinese Maritime i.e., Chinese Maritime and Tsang Yow go up and down completely randomly.
Pair Corralation between Chinese Maritime and Tsang Yow
Assuming the 90 days trading horizon Chinese Maritime Transport is expected to generate 0.9 times more return on investment than Tsang Yow. However, Chinese Maritime Transport is 1.12 times less risky than Tsang Yow. It trades about -0.22 of its potential returns per unit of risk. Tsang Yow Industrial is currently generating about -0.2 per unit of risk. If you would invest 4,185 in Chinese Maritime Transport on October 13, 2024 and sell it today you would lose (220.00) from holding Chinese Maritime Transport or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chinese Maritime Transport vs. Tsang Yow Industrial
Performance |
| Timeline |
| Chinese Maritime Tra |
| Tsang Yow Industrial |
Chinese Maritime and Tsang Yow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Maritime and Tsang Yow
The main advantage of trading using opposite Chinese Maritime and Tsang Yow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Maritime position performs unexpectedly, Tsang Yow can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tsang Yow will offset losses from the drop in Tsang Yow's long position.| Chinese Maritime vs. U Ming Marine Transport | Chinese Maritime vs. Sincere Navigation Corp | Chinese Maritime vs. Taiwan Navigation Co | Chinese Maritime vs. Huaku Development Co |
| Tsang Yow vs. Gordon Auto Body | Tsang Yow vs. YCC Parts MFG | Tsang Yow vs. Depo Auto Parts | Tsang Yow vs. Hsing Ta Cement |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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